Malaysia finance minister suggests China connection to 1MDB

Malaysia’s new government has highlighted a possible China connection in the 1MDB scandal, linking the problems at the graft-tainted state investment fund to two Beijing-backed pipeline projects that cost more than $1bn apiece.

Lim Guan Eng, Malaysia’s finance minister, said on Tuesday that the country’s previous government had agreed to make payments for the Chinese-built oil and gas pipelines “based almost entirely” on calendar dates rather than the projects’ progress.

Work on the three-year projects began in April 2017, but 12 months later only an average of 13 per cent of the construction had been completed, according to a government statement released on Tuesday.

However, almost 90 per cent of the projects’ value had been paid to the state-owned China Petroleum Pipeline Bureau, which won the mandate for both pipelines.

“We are strongly suspicious this is all part of the 1MDB scam,” Mr Lim said at a press conference.